If you are in the process of buying a home anywhere in Northern Virginia right now we understand your frustration. You may have made offers on a few homes and have gotten “shut out” because there were multiple offers. Some homes are sold even before you get a chance to actually see them. Here are some factors that are driving the market:
- There is a very limited inventory of homes for sale entering 2017: Sellers are holding on to their homes longer before moving up or moving on, waiting for just the right time. We are starting the year with about 20-25% LESS inventory of homes for sale than in January of 2016. The good ones in great neighborhoods go very quickly, some even before they are actually “on the market.”
- Rates are up since fall of 2016: Normally, this might indicate a sales slowdown, but fixed rates are still around 4%, less for a VA/FHA loan. Many buyers who were “on the fence” believing that rates would continue to stay at all time lows, are now afraid they will be unable to buy if they wait. There is a lot of pent up demand, therefore early market activity is clearly present.
It is a seller’s market right now. If you are going to get the home you want you need a strategy. We know everything is online now, and beginning your search online and going to open houses is what everyone does. You may actually think you have found the best rate and “gotten approved” online. So you’re ready to roll, right? You couldn’t be more wrong in this market. This strategy is exactly what will get you “shut out” of the market.
This plan is good for dreaming and searching in specific neighborhoods, but when it comes to actually buying what you want, you need to work with an expert, professional buyer broker, with exceptional negotiating skills, who is representing only you in the transaction, not providing “dual agency” to both you and the seller. Be very careful about this or you will end up with no one representing your interests.
Critical things you must know:
- Start your search online to narrow down neighborhoods, schools, etc. That helps you target specifically where you want to be.
- Go to open houses, but make no commitments while you are there. Many agents at “open houses” will, with your written permission, write an offer on the property for you. Remember, they represent the seller, not you. How can you possibly get the best possible price and terms doing this?
- Find, and work with a seasoned professional, full-time buyer broker who knows the Northern Virginia Market and works only for your interests. This means they will proactively search for new homes on the market for you every day, in the neighborhoods you want, and get you in to see them immediately. They will also make sure you are getting “pre-approved” with the best lenders who will get you the best rates for your specific situation.
- It’s very competitive out there! Make sure you work with a seasoned, strong, full-time professional who has exceptional negotiating skills. When there is more than one offer on a property you want, and this is likely to be the case, this will be the deciding factor in whether you get it or not!
A professional buyer broker will guide and empower you to insure that when you do make an offer you are in a position of strength as a buyer. Making a weak offer will never get you the deal in this market. Being a strong buyer means:
- You know exactly what you are getting into. You know what your monthly payments and closing costs are likely to be. No surprises! This gives you a comfort level going forward to you know you are making the right financial decision. The better your credit score the better the rate you will get from a lender. Make sure your credit score is great!
- Not letting the market drive you! Put yourself in control with a solid plan, an agent you trust. This get’s emotional. It’s about where you and your family will live. It might be about where your kids grow up, and you where you grow old together. As much as possible, try to keep emotions out of it. Stick with the plan, and don’t let the market drive you – stay in control!
- Finding the best lender and the best rate for your specific situation. The type of loan approval you have, and the lender will have a direct bearing on whether or not your contract will be accepted by the seller. This is especially true in competitive situations. Make sure you are getting the best advice. Don’t “assume” that because you are approved by someone you already do business with that they are giving you the best rates and terms. If they offer you “money back,” or rebates, there is a reason for it, and you are paying for it in terms of the actual rate offered. Online lenders, when presented as part of a local offer, will not carry the same weight with sellers as a local, recognized prime lender.
- Understanding that it’s not always about price. Sometimes the overall logistical terms of the deal are more critical to the seller than a few thousand dollars difference in price. A good buyer agent will know how to get this information and make sure it is in the written terms of the contract – it will impact the seller’s decision!
- Not giving up if you lose a few! Have your agent find out why your deal was not the best offer to the seller, so you know specifically what was different about the winning offer. Was it price? Was it terms? Did the buyer waive appraisal or home inspection? Some things are just hard to fight on any level, and are just not in your best interest long-term.
A good buyer agent will always represent only your best interests. They will tell you why you should or should not make an offer and what terms are right for you. They will have exceptional negotiating and communication skills so you are always in control, even if you your offer is not accepted. It is much better to make an empowered, informed decision that an irrational emotional one that will not be good for you long term. Don’t let the market drive you – have the right plan and stay in control of your own destiny!